Political Parties Vs Campaign Transparency Standards on Campaign Transparency of Political Entities, Legal Regulation and Best Practices

POLITICAL PARTIES AND CAMPAIGN TRANSPARENCY

POLITICAL PARTIES VS CAMPAIGN TRANSPARENCY STANDARDS ON CAMPAIGN TRANSPARENCY OF POLITICAL ENTITIES, LEGAL REGULATION AND BEST PRACTICES

2018

POLITICAL PARTIES AND CAMPAIGN TRANSPARENCY STANDARDS ON CAMPAIGN TRANSPARENCY OF POLITICAL ENTITIES, LEGAL REGULATION AND BEST PRACTICES

2018 COPYRIGHT © 2018.Kosova Democratic Institute (KDI). Kosova Democratic Institute reserves all rights to this report and no part of this publication shall be subject to reproduction or transmission in any mechanical or electronic form, including photocopying, or any storing or retrieval system of materials without publisher’s prior authorization in writing. The publication may be reproduced or transmitted only for non-commercial purposes. Whenever and whoever intends to use excerpts or different materials of this publication shall be obliged to clearly state the source wherever the excerpts or materials used have been obtained. Should you have any comments, remark, criticism or suggestions, please contact us through any of the options provided below:

Address: Str. Bajram Kelmendi, No. 45, 10000, Prishtina, Kosovo. Tel.: +381 (0)38 248 038 E-mail: [email protected] Web: www.kdi-kosova.org

Author: Florent Spahija

Layout and design: envinion

The publication of this report was made possible by the support of the Ministry of Foreign Affairs of Czech Republic in the frame of the Transition This publication was done through SE.S.TRA. project implemented in cooperation with Transparency International Czech Republic (www.transparency.cz). KDI is responsible for opinions, findings and recommendations of this report and they do not necessarily reflect the views of the donor. CONTENT 6 ABBREVIATIONS 7 INTRODUCTION LEGAL FRAMEWORK ON 8 ELECTION CAMPAIGN KUFIZIMET FINANCIARE GJATË FUSHATËS 10 DHE DEKLARIMI FINANCIAR 12 PËRMBAJTJA E RAPORTEVE FINANCIARE PRAKTIKAT DHE STANDARDET MË TË MIRA NË FINANCIMIN DHE 14 SHPENZIMET E FUSHATËS ZGJEDHORE

TAKIMI ME SUBJEKTET POLITIKE DHE 17 REZULTATET E ANKETËS 20 AUDITORI PËR FUSHATË 21 PËRFUNDIM 22 SHTOJCA 1 TRANSPARENCY AND ANTI-CORRUPTION ABBREVIATIONS

KDI Kosovo Democratic Institute

TI Transparency International

CEC Central Election Commission

Office Office for Political Party Registration and Certification

EU European Union

LGE Law on General Elections

LLE Law on Local Election

TI CZ Transparency International Czech Republic

AAK Alliance for the Future of Kosovo

AKR New Kosovo Alliance

LVV Vetëvendosje! Movement for Self-Determination

NISMA SD Social Democratic Initiative

PDK Democratic Party of Kosovo

6 POLITICAL PARTIES AND CAMPAIGN TRANSPARENCY INTRODUCTION

In the first two decades after the war, Kosovo has organized how much money does it spend for the election campaign; the seven local elections and six general elections. In addition, publication of plans for meetings and visits to be organized Kosovo has organized early parliamentary elections, which throughout the campaign; the obligation for candidates to resulted from the inability of the Kosovo Assembly to con- declare all campaign expenditures, etc. clude its 4-year constitutional mandate. Laws in Kosovo do not regulate a very important segment of Elections and election campaigns in Kosovo are regulated by elections, i.e. the individual funding of candidates’ campaign the Constitution, the Law on General Elections and the Law on for members of the assembly as well as for mayor. The finan- Local Elections, as well as by secondary legislation issued by cial reports of political entities continue to only include the ex- the Central Election Commission over the years with the aim penses of the entity, but not those of the individual candidates. to facilitate and better implement the law. This legal framework, including the related bylaws, regulates the aspects of During the last parliamentary and municipal elections of elections successful progress, while their amendment based 2017, the KDI conducted a survey with competing political on shortcomings identified by local and international election entities on campaign financing and campaign expenditure, observers and by the political parties themselves has stalled. as well as on their willingness to maintain transparency in This is also confirmed by the 2017 Parliamentary Election relation to the public. The questionnaire was sent to over 40 Report of the European Union Election Observation Mission. political entities registered and certified for the elections2. This report highlights that since 2011, there have been sever- Only a small number of political entities responded positively al unsuccessful attempts for a comprehensive reform of the to this questionnaire during the parliamentary elections. On election system and for addressing the identified shortcom- the other hand, during the municipal elections, greater will- ings, including the announcement of early elections within ingness was shown by a number of political entities to provide an extremely short timeframe, and as a result, the shortened information. These changes in the behaviour of larger political deadlines in the election calendar that invalidate a number entities are encouraging with regards to their willingness to of election rights.1 ensure transparency and accountability to the public, with is also aimed by the KDI. This legal analysis has been prepared in the frame of the joint project of the Kosovo Democratic Institute (KDI) and Transparency International from the Czech Republic (TI-CZ) aimed at enhancing the transparency of Kosovo political entities in Kosovo during election campaigns, respectively in terms of election campaign expenditures and financing and the funding of political entities in general. Referring to the best practices in Europe, such as those of the Czech Republic, the KDI aims to promote standards for enhancing transparency in terms of election campaign management, election campaign expenditures, election campaign financing, and financing of political entities in general, which have been applied and proved successful. Among those, noteworthy is the online access to the bank accounts of political entities, which enables the public to see who finances a political entity and

1 European Union Election Observation Mission Kosovo, Report on Parliamentary Election 2017, p. 9 2 Kosovo Democratic Institute “Campaign for Money” Report, November 2017

7 TRANSPARENCY AND ANTI-CORRUPTION LEGAL FRAMEWORK ON ELECTION CAMPAIGN

The legal framework regulating the organization of election fair elections and, above all, be well-informed about what is campaigns in Kosovo consists of the Law on General Elec- offered by political entities/candidates, guaranteeing a cli- tions, the Law on Local Elections, the Law on the Financing mate of democratic tolerance, peace and respect for the rule of Political Parties, the Criminal Code of Kosovo, as well as of law.7 Through this chapter, the lawmaker shows Kosovo’s bylaws that regulate issues regarding election campaign in commitment to provide as much opportunities as possible for Kosovo.3 Bylaws are rules issued and approved by the Cen- citizens to be informed and to participate in the presentation tral Election Commission for managing the election process, of political programs, assuring them that the campaign will which play an important role in the entire election process. be conducted in a spirit of tolerance towards other political entities/candidates, in peace, without hate speech or calls Some of the international principles related to the financing for attack against other political entities/candidates and re- of political entities and election campaigns are: 1. Established specting each other, while complying with the LGE and other rules for income and contributions; 2. Campaign expenditure regulations in force. ceiling; 3. Public funding and subsidies; 4. Disclosure and transparency; and 5. Enforcement and sanctions.4 The Law on General Elections in Kosovo contains a specific chapter on campaign spending limits and financial disclosure, All the above mentioned principles can be found in the follow- which aims at regulating the maximum expenditure ceiling ing international instruments: 1. Venice Commission, Code of of a political entity/candidate during the election campaign Good Practice in Electoral Matters (2002); 2. Venice Commis- period. The LGE also regulates the issue regarding financial sion, Guidelines on Political Party Regulation (2010); 3. Council disclosure upon completion of the election process, the dead- of Europe, Parliamentary Assembly Resolution 1516 (2001); lines and manner of such disclosure, the auditing of reports, 4. Council of Europe, Committee of Ministers Recommenda- public information, as well as sanctions for all cases when a tion Rec (2003) 4; 5. United Nations Commission on Human political entity or candidate fails to comply. Rights, General Comment no. 25; 6. Organization for Security and Cooperation in Europe (OSCE), Copenhagen Document Furthermore, the LGE also regulates the manner of notifica- 1990.5 tion of political events, including the definition of what events may be organized by political entities during a campaign and The Law on General Elections is a very important law to the sanctions applicable to cases when a political entity does not election process, including the election campaign. This Law meet the legal criteria or steps outside the law. also contains the Code of Conduct of Political Entities, their Supporters and Candidates, which regulates how political Media during the election campaign constitutes a special entities, their members and supporters should act during chapter in the LGE, which provides the Code of Conduct for the election period, including the time period of the election Broadcast Media and the Code of Conduct for Print Media. The campaign.6 The purpose of the Code of Conduct in the LGE is LGE obliges the media to ensure a fair and impartial approach to establish the conditions under which the people of Kosovo during the election campaign and the media coverage thereof. would feel free to choose their representatives in free and One of the main provisions of this chapter relates to political

3 Summarized legal framework on the website of the Central Election Commission 4 Kosovo Democratic Institute, “Money in Politic”, June 2017, Prishtina, p. 9 5 Ibid 6 Official Gazette – Law on General Elections in the Republic of Kosovo: (Accessed on 15.08.2018) 7 Official Gazette – Law on General Elections in the Republic of Kosovo: Article 31 of the Law. (Accessed on 15.08.2018)

8 POLITICAL PARTIES AND CAMPAIGN TRANSPARENCY

advertising on radio and television, limiting the duration of In the last early general and local elections, the 10% fund was advertisements. It also regulates the media presence and not allocated to other political entities registered and certified political advertising in print media. by the CEC to run for election. This was also criticized in the report of the European Union Monitoring Mission, which high- Another equally important law on the issue of the election lighted the limitations this brought to the possibility of smaller campaign is the Law on Local Elections in Kosovo8. As regards entities for conducting a proper campaign.11 to the election campaign, financing and code of conduct, this law refers to the LGE, which also applies to local elections Bylaws play a significant role in the election process in the Re- concerning such matters. According to Article 15 of the LLE public of Kosovo. Specifically, the CEC has adopted a consid- in Kosovo, the rules of Chapter V of the LGE apply mutatis erable number of “Election Rules” regulating certain aspects mutandis.9 of the election process. Some of the main rules adopted by the CEC are: Rule No. 01/2013 on registration and operation One of the most important laws concerning election cam- of political parties; Rule No. 08/2013 on certification of polit- paigns and the financing of election campaigns and politi- ical entities and their candidates; Rule No.12/2013 on cam- cal entities is the Law on the Financing of Political Parties.10 paign expenditure limitation and financial disclosure; Rule With this Law, the Republic of Kosovo regulates the manner No. 13/2013 on election campaign and notification of political and conditions of financing, administration, observation, events; Rule No. 14/2015 on financing of political entities and transparency and reporting on the expenditure of assets and sanctions, and other rules not related to the financing of po- revenues of political entities. Specifically, the Law regulates litical entities or election campaigns. important issues regarding the finances and expenditures of political entities during elections, including the election Preventing misuse and manipulation of the election process campaign. has pushed state authorities to foresee criminal offenses, which can only be committed during the election period. The Article 10 sets limits on the amount of budget that may be Criminal Code of Kosovo12 contains a special chapter on crim- allocated by the state for purposes of financing the election inal offenses against voting rights. This chapter of the Code campaign in local and general elections both for regular or contains a total of 11 articles that sanction and describe pro- extraordinary elections. Upon the proposal of the Government hibited actions during an election process, including an elec- of Kosovo, the Kosovo Assembly allocates funds to political tion campaign. Particularly, Article 211 of the Criminal Code entities participating in elections from the Fund for political sanctions the obstruction of any candidate from conducting entities, which shall not exceed the amount of 0.05% of the any activity during an election campaign. Perpetrators of this Kosovo budget. The majority of these funds are allocated to criminal offence are punished with a fine or imprisonment political entities holding seats in the Assembly, which divide it of up to one year. In cases where candidates are threatened based on the number of seats, while the remaining 10% is allo- or are used force against, perpetrators are punished with cated proportionally to the political entities participating in the imprisonment of 6 months to 3 years. elections, which are preliminarily certified for those elections by the CEC. In the 10% share, funds are also allocated to newly registered political entities with the best intention to enable them to present their program to voters.

8 Official Gazette – Law on Local Elections (accessed on 15.08.2018) 9 As appropriate - applied in cases where an issue is regulated by a special law and it is not necessary to regulate it by another law, but the law refers to the special law in cases when it is necessary to apply such norms. 10 Official Gazette – Law on Financing Political Parties (Accessed on 15.08.2018) 11 European Union Election Observation Mission Kosovo, Report on Parliamentary Election 2017, f. 21 12 Official Gazette – Criminal Code of the Republic of Kosovo, Chapter XVIII, Articles 210 – 220. See: (accessed on 15.08.2018)

9 TRANSPARENCY AND ANTI-CORRUPTION CAMPAIGN SPENDING LIMITS AND FINANCIAL DISCLOSURE

For conducting an election campaign, political entities must cept any contribution other than as regulated by the Law on have funds and support from the state budget, membership the Financing of Political Parties. fees, contributions and revenues from their own activities as determined by law. Funding of the election campaign of Rule 12/2013 on Campaign Spending Limit and Financial Dis- political entities is supported at 0.05% of the state’s annual closure foresees that political entities may start collecting budget, while the LGE in Kosovo has left it at the discretion funds from other persons for election campaign expenditures of the Central Election Commission to determine the rule on 6 months before the beginning of the election campaign.16 the maximum expenditure of political entities in each election. The rule is published 5 days after the announcement of the It is also envisaged that all expenditures or services for the election day. Importantly, no political entity has the right to ex- election campaign and intended for campaign purposes, re- ceed the spending limits for the election campaign set by the gardless of whether they were made during or before the CEC rule.13 The last time the CEC intervened in this regulation campaign, should be counted as campaign expenditures and was July 2013. This regulation has not been amended since reported as such.17 and has not specified any other value of expenditure ceiling or increase of spending per voter. Rregullimi i tillë ligjor është masë parandaluese për subjektet politike që aktivitetin e tyre të blerjes së shërbimeve apo The maximum campaign expenditure is based on the total shpenzimeve për fushatë zgjedhore ta bëjën paraprakisht number of voters registered in the voters list, which is 0.50 dhe të krijojnë avantazh me subjektet e tjera politike. Po ashtu Euro per voter.14 koha prej 6 muajsh para fillimit të fushatës zgjedhore, sipas rregullit është kohë e mjaftueshme për mbledhjen e fondeve NIn the last election, the limit or the maximum amount that për fushatë zgjedhore. could be spent by a political entity during the election campaign was 942,753.00 Euros (nine hundred and forty-two Such legal regulation is a precautionary measure to prevent thousand seven hundred and fifty-three Euros). However, political entities from purchasing services or executing ex- the Rule on Campaign Spending Limit and Financial Disclo- penses for election campaigns in advance, thus creating an sure foresees enhanced competencies for the CEC in cases advantage compared to other political entities. In addition, of municipalities with less than 5000 inhabitants. In these according to the Rule, a period of 6 months prior to the be- cases, the CEC may set a specific rule regarding campaign ginning of the election campaign suffices for raising funds for expenses.15 Expenditures, under the LGE, are all campaign the election campaign. expenditures regardless of whether it consists of goods or services spent on the campaign. A political entity cannot ac-

13 Rule No.12/2013 on Campaign Expenditure Limitation and Financial Disclosure, Article 1 paragraph 1.1 14 Rule No.12/2013 on Campaign Expenditure Limitation and Financial Disclosure, Article 3 paragraph 3.1 15 Rule No.12/2013 on Campaign Expenditure Limitation and Financial Disclosure, Article 3 paragraph 3.1 and 3.2 16 Rule No.12/2013 on Campaign Expenditure Limitation and Financial Disclosure, Article 1 paragraph 1.3 17 Rule No.12/2013 on Campaign Expenditure Limitation and Financial Disclosure, Article 3 paragraph 1.4

10 POLITICAL PARTIES AND CAMPAIGN TRANSPARENCY

It is also envisaged that all expenditures or services for the election campaign and intended for campaign purposes, regardless of whether they were made during or before the campaign, should be counted as campaign expenditures and reported as such.

On the other hand, political entities bear legal obligations for election campaign funding and expenditures so that the ex- each of the expenses incurred during the campaign. Each penditures of candidates during the campaign (complete list entity shall keep accurate records of where and how the funds of candidates) and of individual candidates are also included have been spent and then compile a financial report. The com- in financial reporting. pilation of the financial report is mandatory for all political entities that are certified to participate in the elections. Under A very important aspect of the expenditure limits of political Article 40 of the LGE, even political entities which participate entities is the financial reporting of candidates. Currently in in the elections and do not conduct any campaign activity are Kosovo political entities report only the expenditures they in- obliged to report. The Campaign Financial Disclosure Report cur as political entities, but not those incurred by the individu- covers a period from 90 days prior to the beginning of the al candidates of political entities for campaign purposes. The election until the election day. The report should include all lack of such data or lack of the legal requirement for this has the costs of the political entity (branches and other parts of resulted in political entities not including the expenditures of the entity). Days are counted as calendar days, and the report their individual candidates in campaign expenditure report- must be submitted no later than forty-five (45) calendar days ing. This legal deficiency has resulted in political entities using after the election day.18 the maximum expenditures allowed for election campaigns, while candidates, in addition, have an unlimited amount of The European post-election financial reporting standards material assets or services that can be used by activists to set out a shorter legal deadline, i.e. 30 days after the end carry out activities on behalf of the candidate. of the election. Reporting is mandatory not only for political entities, but also for individual candidates and the entire list of candidates.19

This point is also one of the standards recommended by the KDI in terms of amending election legislation related to the

18 Official Gazette – Law on General Elections in the Republic of Kosovo Article 40 paragraph 40.1 19 OSCE/ODIHR-Venice Commission, Guidelines on Political Party Regulation, 2010

11 TRANSPARENCY AND ANTI-CORRUPTION CONTENT OF FINANCIAL REPORTS

The political entities’ financial report on campaign should reports by political entities, but the ECAP has not registered contain accurate data as required by the LGE. For the report any new case since March 2018.24 to be accepted by the CEC Office for Registration and Certi- fication of Political Entities, it should contain the following The public has no knowledge of whether political entities information20: have submitted the financial reports on the expenditures of the last two campaigns on time, and it is not known whether 1 The income of the political entity during the reporting any of them has failed to submit the financial report or if the period, including the source and date of all cash contri- reporting was not adequate. butions; The obligation for financial reporting on campaign expendi- 2 All expenditures, including campaign expenditures, made tures does not end upon submitting the report to the Office. by the entity during the reporting period; and The political entity has other legal obligations in financial terms, e.g. for any payment exceeding 100 Euros, the invoice 3 A balance sheet showing the assets, liabilities and Equity must be kept for up to 7 years along with the financial report of the entity as of the first day of the reporting period. and all other details including account keeping books, bank- ing services for all accounts, documents of property, owner- For all the expenditures of the political entity during the ship or possession, contracts relating to the lease or purchase reporting period, the entity must submit receipts (invoices) of movable or immovable property, and all contributions to for each administrative fee paid. Receipts (invoices) for the entity regardless of when they occurred.25 every paid expenditure by the political entity must be at- tached to the Financial Report. However, in cases where a Such legal provision aims to prevent political entities from political entity fails to submit to the Office for Registration destroying evidence of campaign expenditure for a long peri- and Certification of Political Entities the financial report of od of time. Throughout this period, the state prosecution may the campaign or if the submitted report is incomplete, the request an investigation of the financing manner and check Office may, ex officio, file a complaint with the ECAP against the audited and non-audited reports of the political entity. the political entity for violation of Article 40 paragraph 40.1 Where evidence is found, the prosecutor will be able to file an of the LGE. We have accessed the official website of CEC indictment against political entity officials for financial -mis at different dates21 to check if the financial expenditure use of funds received from the citizens’ taxes. To date, there is reports have been published for the two last elections. This no public data as to whether any investigation has been con- page does not provide any information on the financial ex- ducted regarding the expenditure of political entities during penses of political entities for the two last elections: the election campaigns. No one from the State Prosecutor’s Office early central elections and local elections.22 On the other has dealt with the issue of campaign financing and the legal hand, we have also accessed at different dates the official limitation established by the LGE. Investigating the funding of website of ECAP23, to check if there has been any complaint political entities and the amounts received for the campaign filed by the Office regarding the non-disclosure of financial or even the services rendered by individuals or companies

20 Official Gazette – Law on General Elections in the Republic of Kosovo Article 40 paragraph 40.2 21 On 15.08.2018; 02.11.2018; 29.11.2018 and 04.12.2018 22 CEC website 23 On 15.08.2018; 02.11.2018; 29.11.2018 and 04.12.2018 24 ECAP website 25 Official Gazette – Law on General Elections in the Republic of Kosovo Article 40 paragraph 40.6

12 POLITICAL PARTIES AND CAMPAIGN TRANSPARENCY

for the benefit of the political entity and then presenting the the campaign. The other standard in this regard, according revenues and expenditures in the final campaign report could to the KDI, is the transparency of finances of political entities, be a good starting point for combating money laundering, meaning the publication of financial reports on the political corruption and vote buying. entity’s website.

Contributions made should be recorded and kept in accor- The EU Report on Kosovo Snap Parliamentary Election 2017 dance with the legal procedure. Contribution registration in- highlights the lack of transparency in the finances of politi- volves taking of personal data such as the full name, address, cal entities, saying that: Most do not disclose comprehensive ID or passport number of each contributor, the value of the campaign reports on their websites, claiming a legal provi- contribution, the date of each contribution, and the name of sion that requires public disclosure only after the audit has the person who has received the contribution.26 been conducted. Moreover, the lack of scrutiny raises questions about spending above the limits set by the law, as well Political entities are obliged to have a financial officer, and as accepting unrecorded donations, especially those directed the state is obliged by law to provide accounting and auditing at individual candidates28. training to such officers upon their appointment. Officials may refrain from training if they prove that they have sufficient experience and expertise and that such training is not necessary for them.27

One thing that has been noted and criticized for a very long time by both civil society and international missions in Kosovo regarding the financing of political entities is the failure of political entities to publish campaign financial reports on their websites. The same applies to the annual financial reports of the entity. The LGE does not require political entities to submit their financial reports on the website, but transparency standards require financial reports to be accessible to the public. Each political entity, beyond the legal requirement and in the interests of transparency and accountability, should immediately publish the financial report on the revenues and expenditures made during the campaign on the official website following the end of the election process. Similarly, it would be good if candidates for Assembly members and mayors published all their funding and expenditures made during the elections on the website of the political entity they belong to. By funding and expenditures of the candidates, we refer to the personal funding and expenditures, outside the budget of the political entity, made by the candidate during

26 Official Gazette – Law on General Elections in the Republic of Kosovo Article 40 paragraph 40.6 27 Official Gazette – Law on General Elections in the Republic of Kosovo Article 40 paragraph 40.7 28 European Union Election Observation Mission Kosovo, Report on Parliamentary Election 2017, p. 21

13 TRANSPARENCY AND ANTI-CORRUPTION BEST PRACTICES AND STANDARDS FOR ELECTION CAMPAIGN FINANCING AND EXPENDITURES

Despite the fact that Kosovo has consolidated legislation reg- the public itself. Members of the political subject, including the ulating the election campaign and the way financial reporting candidates, would know where the entities’ financial means should be conducted, world trends indicate further advance- were spent and where the services of the political entity were ment of transparency related to campaigning and election destined. The general public would be very interested on the campaign financing. part related to spending of the public money, but the public always wants to know who the persons which have offered In order to avoid unregistered donations for the political money or services to the political entity are. entity and individual candidates, KDI recommends that the transparency of political entities be advanced and supported KDI recommends that the entity’s main account and sub-ac- through legal amendments and their effective implementa- count be public in real time (online) on the website of the tion. More specifically, political entities should have only one Office for Registration and Certification of Political Entities online bank account, and have a separate sub-account, also (within the CEC). Publishing bank accounts on websites in online, that is used only during the election campaign. countries like the Czech Republic helped increase the transparency and accountability of political entities, a practice that The sub-account that can only be used during campaigns is being embraced by other European Union countries. would be open to all individuals and legal entities for financial contributions to the political entity. On the other hand, the Transparency in funding and campaign expenditures as a political entity would make all purchases and expenditures basic principle of good governance would help the public un- through this bank sub-account, which would make it much derstand how and by whom election campaigns of political easier for auditors to conduct the entity’s financial audit, while entities are supported, and furthermore how the latter spend it would be easier for the public to know who the donor of and report these funds. the political entity is and how much money has the entity collected. In the case of the Czech Republic, a special commission (state body) is established, which is independent, and which The sub-account would also serve to the increase of transpar- receives financial reports from political entities and controls ency and accountability initially inside the political entity, then them. The law has obliged political entities to make their bank membership, candidates and sympathizers, and in the end accounts transparent in real time on the banks’ websites,

14 POLITICAL PARTIES AND CAMPAIGN TRANSPARENCY

Table130 where all the expenses and incomes of the political entity or that are purchased / paid by the political entity. More impor- candidate in the election campaign can be seen by the public. tantly, if the set limit on campaign expenditure is exceeded. The law has obliged political entities or candidates to make all payments through bank accounts. A Political entity or a The practice of opening the account for campaign expendi- candidate has a principal account of the political entity and tures and revenues in the Kosovo case would also be helpful a separate account for the election campaign. All election for the purpose of a fairer reporting by the media and civil campaign expenditures, as well as the revenues the political society on the political entities campaign expenditures. entity possesses, donations or other material goods, should go through the election campaign account. The transparency However, the main issue lies in the fact whether Kosovo of this election campaign account for all kinds of elections, is should make legal amendments on the opening of political not required by law in the Czech Republic, but political entities, entities accounts, of revenues and expenditures from the after the presidential elections (the case in which the law entity’s account, or should it be left to the will of the political required transparency of the accounts through publication) entities to accept the principle of transparency and voluntarily continued the online publication of bank accounts even at the initiate publishing, initially of the unaudited financial reports time of the general and local election campaign.2930 and then real time revenues and expenditures.

Everything is transparent and easily accessible by anyone Kosovo Democratic Institute, during July and August 2018 who wants to get information regarding each entity in Czech had separate meetings with political entities: Democratic Republic. But in their case, apart from the general public, this League of Kosovo, Democratic Party of Kosovo, Movement for was of a great benefit for the media and civil society organiza- Self-Determination, Alliance for the Future of Kosovo, Social tions, which are able to access and make proper analyzes of Democratic Initiative, New Kosovo Alliance and Alternative on what has been presented and paid through the accounts, how the issue of election reform including campaign expenditure much funds have been deposited, and what are the services and opening of the respective bank accounts.31

29 Czech Republic website on Financial Transparency Table with financial data (real-time revenue and expenditure) presented in the online account of the winning political subject of elections in the Czech Republic. 30 Online accounts example of the political subject currently governing Czech Republic 31 KDI has communicated and requested meetings with other parliamentary subjects including the Serbian minority community but they refused since they have no opinions.

15 TRANSPARENCY AND ANTI-CORRUPTION

If the law is amended it would affect CEC as the only institution 3 Publication of the finances of each candidate in the in the country dealing with organization and management of campaign. Each political entity must publish and oblige elections. Additional powers would be added to the Office for all candidates to report to the entity they belong to. Their Registration and Certification of Political Parties, as well as financial contribution to the political entity’s campaign to the staff that would cover the financial control of political should be known including data on how did the candidate entities in real time. Normally this involves a financial cost as financed his/her personal campaign. Candidates may be it will be a new institution. On the other hand, an additional obliged under the LGEs to submit financial reports of implication would be the definition of the body to which this their individual campaign expenditures to the political institution would report, as well as its independence from entity, and then the political entity incorporates them into politics. the central account as revenue and expenditure. The financial participation of candidates in the campaign must The best option would be for the institution or office to be -in also be recorded in the campaign financial report. dependent and report to the Assembly of Kosovo on all issues. Office staff should be professional and work towards increas- 4 Publication of data on legal entities (companies) that ing the level of transparency and accountability of political donate to the political entities, and not only the owners. entities, at the same time helping at increasing standards for With this legal amendment, the public would know who free and democratic elections. the ultimate owner that donated to the political entity is, especially in cases of companies with many owners that Given the need of Kosovo to implement good practices that are kept secret. In addition, political entities should pres- are not stipulated by law, the only solution remains the es- ent in their financial report the services that companies tablishment of European standards in the Law on General have provided for the entity and which can be converted Elections after the electoral reform, or even without electoral into monetary values. reform, only with new amendments. 5 Publication of the schedule of all events that the polit- The Kosovo Democratic Institute together with Transparency ical entity will organize during the campaign. It should International of Czech Republic proposes 5 Standards that also include events that are organized or to be organized would increase the transparency and accountability of po- by the candidates without the support of the political en- litical entities to the public, beyond the foreseen legal obli- tity. gations.

1 Publication of the names of all members of the electoral headquarters of the political entity, and appointment and publication of the name of the campaign financial manager. Publication of names of members of the electoral headquarters (including headquarters at regional branches) of the political entity and the name of the fi- nancier appointed specifically for the campaign would increase the transparency of the political entity toward the public.

2 Legal liability obliging political entities to open financial accounts for election campaign expenditures. Opening accounts implies making it publicly available and accessible in real time through the Central Election Commission portal, any other portal or the own portal of the political entity/candidate.

16 POLITICAL PARTIES AND CAMPAIGN TRANSPARENCY MEETING WITH POLITICAL ENTITIES AND SURVEY RESULTS

Kosovo Democratic Institute, during July and August 2018 For the purposes of this analysis, we will analyze only the had separate meetings with political entities: Democratic answers to questions related to the expenditures of political League of Kosovo, Democratic Party of Kosovo, Movement entities that affect electoral reform. The table below presents for Self-Determination, Alliance for the Future of Kosovo, an overview of the answers/survey results. Social Democratic Initiative, New Kosovo Alliance and Alter- native on the issue of election reform including campaign expenditure and opening of the respective bank accounts. KDI has communicated and requested meetings with other parliamentary entities including those belonging to Serbian minority community but they refused to meet, declaring that they have no opinions concerning this issue.

In addition, KDI has prepared a questionnaire with of 21 ques- From the answers received tions related to electoral reform, in general, to measure the it is noted that, regarding tendency of political entities whether they are ready to make some issues, there are the reform and what would be the amendments that they would push forward to make them part of the law on elec- differences between tions. Questions of the questionnaire were also asked in the the answers given in individual meetings with political entities. Entities have given their opinions on the issue of electoral reform in general. the meeting and written KDI set a deadline of over 15 days for the political entities answers sent by the political to respond to the questionnaire, but not all political entities entities. responded.

The questionnaire was sent to 8 political entities, while KDI received answers from only 5 of them. Political entities such as Democratic League of Kosovo, Social Democratic Party and Alternative did not respond to the KDI questionnaire. From the answers received it is noted that, regarding some issues, there are differences between the answers given in the meeting and written answers sent by the political entities. There are also cases when entities did not answer in some questions.

17 TRANSPARENCY AND ANTI-CORRUPTION

Names of Donor names Online account headquarter (natural persons members and legal persons) AAK Yes Yes Yes

Yes AKR Yes Llogari online Yes

Yes LVV Yes Yes Llogari online together with the budget

NISMA No SD Yes If the law requires it Llogari online and depending on the donation amount

Yes PDK Yes If required by law if required by law

Table of Survey Results32

Each of the political entities has expressed their opinions on parliamentary elections of 2017.33 On the other hand, on the the given questions, and their answers are similar in almost website of the Democratic League of Kosovo there are finan- all questions. But what is more important is that most of these cial reports from 2014 and 2016, but there is no new financial political entities have not published their financial reports on report from the last election campaign.34 official websites, excluding the Movement for Self-Determi- nation, which has published an unaudited report of the early

32 Survey with Political Subjects 33 LVV Financial Report last accessed on 05.12.2018 34 LDK website last accessed on 05.12.2018

18 POLITICAL PARTIES AND CAMPAIGN TRANSPARENCY

Do PEs have the will to Publication Publication of the Candidates apply any of the above of the budget included the declaring their questions even if not Schaedule source of funding funding Audit required by law Yes Yes Yes Independent auditors Yes

Independent No Yes if required by law Institution / National unless required Audit Office by law Yes

National Audit No Office or the Anti- Not responded Yes if required by law Corruption Agency Yes No Open for changes Yes if required by law National Audit Office

Yes Independent Yes auditor under the If required by law according to the if required by law supervision of the law CEC

The Democratic Party of Kosovo35 and the New Kosovo Alli- Despite the fact that, in their responses our political entities ance36 have no financial reports on their websites. While the expressed in favor of greater transparency, in reality, they Alliance for the Future of Kosovo37 and the Social Democratic do not even publish their financial expenditures reports on Initiative38 are two political entities whose websites are not their websites. active.

35 PDKwebsite last accessed on 05.12.2018 36 AKR website last accessed on 05.12.2018 37 AAK website last accessed on 05.12.2018 38 NISMA Social Democratic Initiative website last accessed on 05.12.2018

19 TRANSPARENCY AND ANTI-CORRUPTION CAMPAIGN AUDITOR

The campaign auditor implies an organization that will audit If the political entity fails to submit a campaign financial re- the election campaign expenditures of political entities. The port under the LGE, then CEC has the right to charge the po- Office for Political Entities Certification has the right to audit litical entity with administrative fees, which then are remitted any campaign finance disclosure report or candidate financial to the Kosovo Budget.44 The political entity may appeal the disclosure form.39 decision of the CEC within 5 working days of being notified of the decision. The appeal can be sent to the Basic Court in the Political entities are obliged to cooperate with the Campaign Department for Administrative Matters.45 The Basic Court as Auditor and provide the auditor with full access in the finan- first instance in this case, cannot impose sanctions in respect cial records of the entity.40 Furthermore, the auditor, upon of a matter that is subject to administrative fees. In case that, completion of the audit, shall present the preliminary results after the challenges made to the CEC decision in all court in- of the audit, including a list of any apparent errors and omis- stances, the CEC decision remains unchanged by the Courts, sions. These preliminary results are sent to the highest body then the CEC decision remains in force and becomes final, and of the political entity within a period of 45 days of commencing the political subject must make the payment and submit the the audit and no later than 4 months after the elections.41 payment slip to the office for Registration and Certification Upon receipt of this report, the political entity is obliged within of Political Entities.46 15 days to address the errors and give explanations on the errors or omissions identified by the campaign auditor.42

Once the campaign auditor receives the changes and explanations from the political entity, prepares a final audit report and submits it to the CEC, and then to the highest executive body of the political entity. The deadline for submitting the final report is 15 days from the receipt of responses from the political subject. The Campaign Auditor’s Final Report iden- tifies any error or omission in the financial report, taking into account explanations of the political subject.43

39 Official Gazette - Law on General Elections in the Republic of Kosovo Article 41, paragraphs 41.1 and 41.2 40 Official Gazette - Law on General Elections in the Republic of Kosovo Article 41, paragraph 41.4 41 Official Gazette - Law on General Elections in the Republic of Kosovo Article 41, paragraph 41.5 42 Official Gazette - Law on General Elections in the Republic of Kosovo Article 41, paragraph 41.6 43 Official Gazette - Law on General Elections in the Republic of Kosovo Article 41, paragraph 41.7 44 Official Gazette - Law on General Elections in the Republic of Kosovo Article 42, paragraph 42.1 45 Official Gazette - Law on General Elections in the Republic of Kosovo Article 42, paragraphs 42.3 and 42.4 46 Official Gazette - Law on General Elections in the Republic of Kosovo Article 42, paragraphs 42.5

20 POLITICAL PARTIES AND CAMPAIGN TRANSPARENCY CONCLUSION

Financial reporting and the transparency of revenues and The information and media research would provide data on expenditures during the election campaign are essential is- the donations of the political entities. Then the connections sues and should, therefore, be a priority for political entities. between politics and business would become obvious, es- Transparency in financial issues is an additional commitment pecially in regards to awarding public tenders to campaign of the political entity towards the public interest in relation donors. In addition, it would make it easier for the prosecution to its activity. to investigate cases of political corruption and bring them to justice. For many years in Kosovo the implementation of a genuine electoral reform has been part of discussions, but everything The area of financing of political entities needs additional has remained at the level of political statements. Usually, the studies that elaborate more in-depth the transparency of topic of reform has been opened for discussion a few days be- political entities financing and expenditures. Our recommen- fore the elections and has ended during election campaigns. dations on transparency standards are positive steps that The electoral reform should also include the increased fi- lawmakers can incorporate in the process of the electoral nancial transparency of political entities, including financial reform, so that these standards, through the law, turn into transparency standards that are applied in European Union obligations binding for all political entities and candidates countries. participating in elections.

The accessible bank accounts on the CEC website that would enable the public to see in real time all political entity’s bank- ing transactions, is a crucial step in increasing the level of transparency of political entities vis-à-vis voters and the public. Regarding this proposal, KDI proposes to take into consideration the Czech Republic model. Likewise, the above- mentioned standards would help the public and the media to have more information regarding the political entity’s internal structures, donors, service providers on behalf of political entity, budget, as well as on the expenditures of the entity during the campaign.

Another very important issue which should be included in the electoral reform is the financial disclosure of every candidate. The reform should precisely define the legal norm that would oblige each candidate of a political entity, regardless of the position he/she is running for, to present a financial report on personal revenues and expenditures during the election campaign. This would be another transparency standard for political entities, which would then be obliged to calculate the revenue and expenditure reports into their final report. Consequently, the political entity together with the candidates would not be allowed to exceed the maximum limit of expenditures set by the CEC.

21 TRANSPARENCY AND ANTI-CORRUPTION ANNEX 1

mendations and that the transparency of the political entities STATEMENTS OF PARTICIPANTS is linked to the way how Kosovo institutions govern and how transparent they are. She added that the financial reports on IN THE DISCUSSION MEETING ON the budget allocated by the state for political entities come to ANALYSIS the Assembly and the expenditures are transparent, but the problem, according to her, is the donations they receive and which are not related to the institutions. In the end, she added At the meeting held on 20.12.2018, the participants were in- that the best practices should be taken and become part of the troduced with an analysis of the current law on the financing law, because this is the reason why the law is being amended. of political entities and recommendations or standards that KDI / ICT advocates aiming at increasing the transparency and The MP from the Social Democratic Initiative, Mr. Enver Hoti, accountability of political entities related to their financing. stated that the analysis is at the right time and that the transparency of political entities determines many issues, not only The MP from Self-Determination Movement, Mr. Ali Lajçi, stated on the competition between political entities but also within that the presented standards are indispensable and they should the political entities themselves. The MP criticized the absence be applied implemented at state level. Normally, according to of audit of political entities financial reports for 3 years. him, such a change cannot be done without accompanying it with implementing laws, as well as measures or sanctions to Isuf Zejna, from the Democracy plus (D +) organization, stated be imposed in case of failure to comply. Concerning opening of that it would be good not to interfere in the present draft, be- bank accounts or online accounts, he added that it is difficult cause whenever interventions are made in laws they usually to apply as such requirements are usually not respected. In the cause problems in implementation. According to him, trans- end, he added that we should not allow ambiguity in our laws, parency is not a difficult thing, but even when political parties because it then remains a matter of individual interpretation. are transparent and publish their financial reports they are not The MP from the Democratic League of Kosovo, Mr. Naser Os- understandable. He added that it would be ideal if the auditing mani, stated that the draft law on financing political entities was conducted by the National Audit Office. is coming in a right time and is a good opportunity to resolve all issues related to political entities financing. According to Adnan Rrustemi from Self-Determination Movement, a former him, it should be insisted on increasing transparency so that member of the CEC, stated that the present legislation is solid as all economic activities become transparent on the websites of regards to political entities financing, but the implementation of political entities. On the other hand, he said that CEC should be the law is a problem. He added that even the auditor does not re- further strengthened in terms of financial oversight, which is veal the truth of political entities financing, and that the unknown also linked to auditors’ reports. According to MP Osmani, audi- is not presented in financial reports. He stated that he is in favor tors are not investigators but they only ascertain the situation. of returning the competences of the financial audit of political Another proposition he made was that, in case of violations, entities back to the CEC, in order that the CEC selects the auditor political entities should be blamed and not the individuals. Re- and the process is concluded faster, but he added that the best garding the accounts transparency, he added that this issue option would be for the financing from the public budget to be has to do more with the level of our society, and that the laws, audited by the NAO, while the rest by the private auditor. according to him, should be written for this society, thus taking the best practices from developed countries but make sure that Valmira Selmani from CEC stated that the new law should those practices are applicable for us. include an article stating that the political entities that are registered in the CEC shall be audited and that the audit shall not The MP from the Democratic Party of Kosovo Ms. Safete be conducted in parts. According to her this would increases Hadërgjonaj, stated that she values the presented recom- the transparency.

22 POLITICAL PARTIES AND CAMPAIGN TRANSPARENCY

Cataloging in publication – (CIP) National and University Library of Kosovo

ISBN

23 TRANSPARENCY AND ANTI-CORRUPTION

KDI is a Non-Governmental Organization (NGO) engaged to support democracy development by involving citizens in public policy-making and strengthening civil society sector, with the aim to impact the increase of transparency and accountability by public institutions. For more information about KDI please visit www.kdi-kosova.org

With the financial support of: